QR National Ltd. (QRN.AU), Australia's largest rail freight company, said Thursday it is evaluating building a railway that could connect a number of isolated iron-ore mines in the country's remote Pilbara region with Port Hedland and export markets.

It has signed an agreement to bring on mining company Atlas Iron Ltd. (AGO.AU) as a cornerstone user, although other companies would be connected to the line through a staged development.

Atlas, in a separate statement, said the joint feasibility study with QR National is expected to be completed by the end of the year, and haulage could begin as early as 2015.

Iron-ore production in the Pilbara is dominated by Rio Tinto PLC (RIO), BHP Billiton Ltd. (BHP) and Fortescue Metals Group Ltd. (FMG.AU), which maintain a tight control over rail lines they each built to transport their ore to ports in Western Australia state.

-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; robb.stewart@dowjones.com

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